So when I took the transaxle up to be rebuilt, I was talking with the owner and he said that it was not a 1979 transaxle.
It is properly coded as AT, but the physical gearbox case and differential side plates are not from a 78-79 vehicle.
My heart sunk.
Sometime in the past 41 years the transaxle has been replaced with one from 75-77.
I’m still thinking 137K is most likley and sometime in that period, something happened to the transaxle.
Now the owner of Jim’s Custom VW said that there we issues back then with the reverse gear having problems on a lot of cars, and that whoever “fixed” it did so by putting in a like-type AT transaxle, but not the exact same 78-79 one.
I regret not taking a photo of the differences, but it is substantial in both the casting and the differential side plates.